Appellate Court Follows Safari Over DiMarco, Although Reversing Denial Of Postarbitration Fees To Prevailing Party In Superior Court Proceedings.
The Second District, Division 7, in Cohen v. TNP 2008 Participating Notes Program, LLC, Case No. B266702 (2d Dist., Div. 7 Jan. 29, 2019; posted Jan. 30, 2019) (published) dealt with a situation where a superior court confirmed an arbitrator’s decision to deny contractual fees to an arbitration prevailing party based on the unclean hands of the party’s founding member who had culpability. The superior court also denied attorney’s fees to the prevailing party in postarbitration confirmation/vacatur/correction proceedings.
The appellate court affirmed the arbitrator’s fee denial but reversed the denial of postarbitration fees ruling.
In deciding that the arbitrator has the power to deny fees to a clearly prevailing party (which cannot happen at the California state court level), the 2/7 DCA decided that reasoning in DiMarco v. Chaney, 31 Cal.App.4th 1809 was flawed and followed instead the opposite rationale acknowledging the arbitrator’s power to do so as set forth in Safari Associates v. Superior Court, 231 Cal.App.4th 1400 (2014). It recognized that an arbitrator can make his/her award ex aequo et bono (according to what is just and good). [Who says Latin is completely dead in judicial decisions?] APPELLATE HINT—However, the panel in this matter did indicate that precise drafting in an arbitration submission agreement might compel the arbitrator to award fees to the prevailing party, if drafted the right way.
With respect to the postarbitration fee denial, that was error because fees are awardable under Code of Civil Procedure section 1293.2, in tandem with the definition of fees as “costs” in other CCP provisions.
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